Florida politics, policy, and plain-spoken analysis by Gary Fineout.

Taxes

November 14, 2017

Florida Gov. Rick Scott, who has a little more than a year left in office, is releasing his final set of budget recommendations on Tuesday.

And it's sure to contain many of the same items that the Republican governor has recommended in past years: A smattering of tax cuts, probably a small increase in school funding (possibly backed by a rise in property values), and his evergreen request that all state workers pay the same for health insurance. (Legislators have rejected this idea year in and year out.)

In that first ever proposal, Scott rolled out a spending plan that called for nearly $5 billion in spending cuts in 2011-12 fiscal year, which would then be used to help with $2 billion of recurring tax cuts.

When he first ran for governor, Scott constantly touted his "7-7-7" plan that he said would lead to nearly 700,000 jobs if the plan's seven steps were followed over seven years. (Those 700,000 jobs were on top of normal growth, Scott said at the time, but that's an argument for another time.)

A central plank of this plan to help the state's economy was the elimination of Florida's corporate income tax. Scott promised to completely get rid of it by 2018, starting with a $458 million reduction in year 1 and a $1 billion cut in year 2. (Another promise was to substantially cut the property tax rate charged to homeowners for schools.)

"It’s not a budget that dabbles. It doesn’t offer a little something for every special interest or sweeteners for certain people," Scott said at the time. "It’s a two year budget that faces realities now, rather than putting them off for later. It makes the hard decisions. But it makes the right decisions for Florida’s future."

He added: "We will capture more jobs if other states have a business tax that Florida does not have. We are competing with 49 other states and many countries for entrepreneurs who start, grow and move companies based on where they can get the best return."

But Scott's push for sweeping and deep budget cuts paired with a mammoth tax cut fell flat with the GOP-controlled Legislature.

Still grappling with the fallout from the Great Recession and a budget shortfall, legislators sent Scott a budget that included some tax cuts (mostly property taxes charged by water management districts), spending cuts and a contentious move to deducting money from public employees to help pay for their retirement plans.

Instead of cutting the corporate tax income rate like Scott wanted, legislators instead agreed to exempt businesses from paying the tax if they only made a certain amount of money. Over two sessions the exemption level was raised from $5,000 to $50,000.

The move exempted many businesses from paying the tax, but as Scott leaves office it remains a substantial tax source for Florida government. Legislative economists predicted the state would wind up taking in about $2 billion this year from the corporate income tax.

Scott has tried to include further tweaks to the corporate income tax in his annual spending plans, but he has been unable to make any substantial progress on his initial pledge.

And this year - ahead of a likely campaign for U.S. Senate - the governor didn't even try.

He recently rolled out a modest tax and fee-cutting package that includes tax holidays and a rolling back of driver's license fees. His package was entirely targeted to residents and individuals and included no tax cuts for businesses or

When pressed about it, Scott said recently that he still would like to cut the corporate income tax, but he did not express any disappointment that he was unable to achieve what once was a top goal.

"You fight everyday for the things you think are a priority and that's what I have done," Scott said. "I would love to cut more taxes, but there's actually three branches of government."

March 27, 2017

After watching the prelude for weeks, the Florida Legislature and its Republican leaders will finally put pen to paper this week (so to speak) and release their detailed spending plans for the coming fiscal year.

After listening to leaders in the House and Senate discuss their priorities, the expectations are that the rival budgets could be widely divergent in what they cut, what they keep and what they enhance.

There are a multiple reasons for that, whether it's Senate President Joe Negron's push for increased money for state universities, or House Speaker Richard Corcoran's insistence that the state shutter its economic development agency Enterprise Florida.

But less noticed is that the House, Senate and Gov. Rick Scott have chosen to include information that supports their arguments, while seemingly sidestepping other salient points. This could influence the tenor of the debate that is about to intensify.

So it might be worthwhile and step back for just a second to recall how everybody got here and what's important to remember for the budget battle that still lies ahead.

So here's a few things to understand:

DON'T CALL IT A DEFICIT: There is no budget deficit this year. Plain and simple.

To understand the underlying budget situation, it's important to realize this. In Florida a deficit occurs when the state collects less money than what is needed to pay for things that are in the budget.

Florida's tax collections are in fact growing. The main budget account - known as the general revenue account - is expected to grow in the current fiscal year by 4.4 percent, or $1.23 billion. This same account, which relies on a variety of tax sources but primarily the state's sales tax, is expected to grow $1.16 billion - or 3.9 percent - in the fiscal year that starts on July 1. That's a stark difference from the depths of The Great Recession when legislators were required to cut spending (or in 2009 raises taxes) to make the math work.

So then where does the confusion lie?

Well, let's start with a document called the Long-Range Financial Outlook. Thanks to current Sen. Tom Lee, the voters in 2006 approved a constitutional amendment that requires the development of an outlook that looks out over a three-year period and reviews both sides of the ledger - the expected spending and the revenue coming in.

The outlook comes out once a year. The one approved in September found that when balanced together legislators had a windfall of only $7.5 million for the 2017-18 fiscal year. And the economists and analysts who put it together warned of a "structural imbalance" that could create a sizable budget gap in the years to follow. That has sparked talk of deep budget cuts including a House plan to cut at least $1.4 billion alone in the coming year.

But it's important to remember this budget gap is a summary of both revenues - and expenses.

The long-range outlook put together assumes nearly 50 different expenditures - and that greatly impacts the bottom line.

Let's start with tax cuts: The overall outlook assumes that there will be $254 million in recurring tax cuts in each of the next three years. This is based on a historical average in recent years, but the point is this, part of the projected gap is based on the assumption that legislators will continue to cut taxes, which adds to the potential shortfall, which helps trigger the need for cuts elsewhere to close that gap.

The budget shortfall or gap that is projected to occur is also driven by a long line of other spending decisions where economists plugged in the numbers based on historical decisions made by legislators: The outlook assumes a $1 billion reserve on top of other existing budget reserves. It assumes that legislators will fully fund increased enrollment in public schools, pay for increases in Medicaid, and set aside more than $400 million over the next three years to pay for increased costs associated with the state employee health insurance program.

But there's more - the outlook assumes an increase of per-student funding above enrollment growth, grants to libraries and museums, local government park grants, and in the out years money spent on replacing a law-enforcement radio system and the replacement of Florida's accounting system.

So what does that mean? In reality, the budget debate is one about choices.

Do legislators choose to keep cutting taxes? Do they choose to keep spending money on certain things? Do they choose to make deep cuts due to a philosophical belief that government is too big and too expensive? Do they refuse to revisit past decisions that contribute to their structural imbalance - including for example - decisions to give out tax credits to various businesses. This could include anything from the insurance tax credit that is targeted by the Senate, or the tax credit scholarship program that continues to grow. (The amount of tax credits available for the scholarship program is projected to increase from $559 million this fiscal year to nearly $699 million next year.)

THE SCHOOL TAX DEBATE: If there is one item that could derail the entire budget process it's the thorny annual dilemma over school property taxes.

Here's the problem: As property values rise, this translates into more money collected by local school districts that could be spent on public schools. In other words, if the value of your home goes up you will pay more in taxes in the coming year - unless the tax rate is lowered by an equal amount to offset the increase in values.

Legislators don't appropriate this local property tax money - BUT - they do draw up spending plans that assumes a mixture of both local and state funding. This is known as the Florida Education Finance Program or FEFP and districts that wish to draw down the state funding must collect a certain amount of money. (This is known as the required local effort or RLE.)

Republican leaders, including Scott, have used these increased local tax dollars to boost the overall amount spent on public schools. Some legislators have defended the practice by noting when property values plunged during the Great Recession that the state helped offset the loss (but not completely.)

But Corcoran has vowed that he will not let this happen this year - and he's taken a much stronger stance on this than practically every other spending item in play.

Important piece of history: Corcoran was chief of staff for then-House Speaker Marco Rubio when the Legislature waged a lengthy debate over property taxes during a time when Florida's real-estate market was super heated. The position of the GOP-controlled Legislature at the time was pretty simple: If local governments take in more tax dollars because of rising values, then it's a tax increase. Legislators forced cities and counties to roll back their tax rates. So Corcoran is being consistent with that position. (Also worth noting: Several senators, then in the Florida House, also took that position. Dennis Baxley, Anitere Flores, Bill Galvano, Denise Grimsley and Perry Thurston voted in favor of the bill to force local tax rollbacks.)

Scott has maintained that this isn't a tax increase and his own budget recommendation relies on nearly $558 million in increased local school taxes to help pay for an overall 3 percent increase in per-student funding. Scott has tried to suggest this is no different than if the price of a car goes up and you pay higher taxes because of the higher price. Yeah, but the government doesn't set the price of a car. In this instance government at both the state and local level have a hand in deciding how much property owners will spend.

BREAKING DOWN OTHER FLASHPOINTS...Quick hits on remaining things to look for and understand:

GAMBLING: Right now all these budget projections being thrown out do not assume any changes in Florida's gambling laws or a new compact with the Seminole Tribe. That means if - and it's a pretty big if - legislators could stroke a deal with the Seminoles and the rest of the players in the seemingly intractable gambling turf war it could provide an injection of cash that could help smooth things over.

GULF COAST SPILL MONEY: While this may not command a lot of attention around the state, the ongoing tug-of-war over money the state received as part of a settlement over the 2010 BP oil spill in the Gulf of Mexico is part of the overall dynamic that will decide how this session ends up. The state last year got $400 million as its first installment. Under an existing law some $300 million is supposed to go to eight Panhandle counties that were impacted the most by the spill. But the Legislature has to yet to agree to send the money out the door.

Corcoran and House leaders didn't like the arrangement allowed under the existing law so they have crafted a bill that places more oversight on the spending - and prohibits any of the money being used on economic development projects. The Senate so far has a different approach and they have not agreed to all the House restrictions. This money is a big, big deal to the Panhandle Republicans and in Tallahassee parlance - this is their going home bill - meaning they can't go home unless they get it worked out.

ECONOMIC DEVELOPMENT: This item has gotten plenty of press especially since it has triggered a feud between Scott - who wants to keep funding intact for the state's economic development agency - and House leaders who want to eliminate Enterprise Florida and scale back Visit Florida, the tourism marking agency. The Senate so far is siding with Scott. The question is will they remain in sync with the governor all the way to the finish line.

HIGHER EDUCATION: Negron's bid to increase funding to state universities as part of an effort to propel them into the top ranks of the nation's public colleges is going to be rebuffed by House leaders who contend that universities are misspending what they have now (some of which came with the help of legislators who placed projects into university spending lines.) The one word of caution in this debate is that numbers get thrown around sometimes without a clear sense of what they mean.

Universities are dependent on several streams of funding and it appears so far that the House is lumping everything in to make an argument about overall spending. There are differences between straight state funding and the money that universities take in from other sources - whether it's tuition, money from federal grants, or money medical schools earn from seeing patients. For example, the amount of tuition money can go up even if the rates don't because universities admit more students. T

The House has zeroed in on spending among the foundations and whether it's proper for the universities to use state funding to subsidize fundraising operations. So far, the universities have had a muted response and not given a clear explanation as to practice. One big question is whether or not the House will advocate for blocking universities from using their foundations to pay university employees above state limits.

TRUST FUNDS: It's important to remember that some taxes and fees charged by the state don't wind up in the main budget account. Instead they are set aside in what are known as trust funds. Year in and year out special interests groups argue that money collected in these funds belong to them. And year after year the Legislature politely ignores this and transfers money of these trust funds and uses to help balance the budget.

SPEND NOW, PAY LATER? Unlike the federal government, Florida is required to have a balanced budget every year. That doesn't mean of course the state doesn't have debt. It does.

Until Scott came into office, past governors and legislators authorized borrowing for fixed capital costs such as building college buildings, roads and acquiring environmentally-sensitive lands. Scott started drawing a firm line about this and led the charge to push down the state's debt load. As of last June, it was $24.1 billion or more than $4 billion lower than it was when Scott came into office.

Negron's plan to build a reservoir south of Lake Okeechobee calls for increased borrowing. Currently the bill moving authorizes more than $3 billion in bonding authority to go to various projects, but with an estimated $1.2 billion going to the reservoir project. But that's not what is needed right away in this year's budget.

If the plan is approved it would carry an estimated $100 million price-tag to this year's budget since the bonds would be paid back over 20 years in installments.

So Negron's plan has an immediate cost to the treasury, but it's also important to understand that the full amount of his project will not included in this year's budget.

BOTTOM LINE: Under the current schedule legislators are operating under the House and Senate are expected to pass their budgets during the second week of April.

That week is already truncated because of religious holidays so it is highly unlikely that any negotiations or work can begin until April 17. That means legislators will have about 15 days to get everything worked out in order to get a budget finished on time. That's because Florida law requires the budget to be finished 72 hours before the final vote.

So that's a lot of ground to cover in a short amount of time. Besides the above-mentioned topics there's other issues at play, including pay raises, more money for charter schools etc.

January 11, 2016

After one of the most tumultuous years since Republicans assumed control of the Florida Legislature - the GOP-controlled House and Senate return this week for a 60-day jaunt that many legislative leaders hope/predict is relatively calm and uneventful heading into what could be a highly unpredictable election year.

Most insiders of course can recount the score: The budget meltdown, the abrupt ending of the 2015 regular session, two failed redistricting special sessions, a budget finally passed with days to go before a state government shutdown.

Legislators are returning early this year as part of an experiment to move up the date so that lawmakers can be back home in time to spend spring break with their families. (It would take a change in the constitution to move up session start for every year.)

Here then are the 5 biggest questions of session:

Can everybody just get along?

The expectation is that the resolution of the long-simmering Senate presidency battle (which was won by Sen. Joe Negron) and the Senate's tabling of Medicaid expansion should make it easier to reach a consensus on the state budget and other issues. Throw in the fact that it's an election year and there is an anticipation that there will be a willingness to compromise. But that may not capture the complicated situation at hand.

First all, there'sGov. Rick Scott who enters the session with a longer wish list than normal. And it's not just the $1 billion tax cut package and Enterprise Florida reforms that the governor wants (although that appears to be a big ask). Scott put together a $3 billion gambling deal with the Seminoles and he's also pursuing his health care transparency package.

Last year Scott showed that there is a price to pay (through his substantial budget vetoes) if you don't go his way. So you can be assured that remains on the minds of many legislators.

But let's not forget there are some Scott agency heads whose fates remained unresolved, or that there remains a split in fundraising/political activities that has resulted in the Senate and Scott raising money separately from the party. You can also throw in the whole unsettled situation in the Senate due to a redrawn state Senate map that could theoretically force some senators to moderate their positions.

Lastly, a key question is how supporters of former Gov. Jeb Bush and U.S. Sen. Marco Rubio in the Legislature will view Scott's decision to nudge ever so closely to endorsing GOP presidential candidate Donald Trump.

Say what you will about the sausage-making in the state Capitol a lot of it still depends on connections and relationships and many of the items cited could play a role. And if Scott is viewed as isolated from members of his party then there is even less willingness to work with him.

Is it possible to ever reach an agreement on gambling?

Well, you certainly wouldn't want to bet on it given the competing forces (including dog and horse tracks from outside of South Florida) who don't like some of the fine print on the deal that Scott reached with the Seminole Tribe. In the past few years attempts to pass major gambling bills have floundered amid the Scylla and Charybdis that exists in the Legislature on this issue.

But Scott remains a wild card on this. The governor, who began his business career as a deal maker, put together a proposed compact with tribal officials that was guaranteed to get big headlines and promised a big payout.

Throughout his time as governor Scott has remained, for lack of a better word, agnostic about gambling in the state. In other words, the governor isn't going to back the tribe, the dog tracks, the anti-gambling factions including Disney, Las Vegas casino owner Sheldon Adelson, or even Trump at all cost.

It would not be surprising if Scott's approach is basically: 'Hey, I helped put together a deal. Tribe, it's up to you and your lobbyists to get it passed.' And more importantly, is Scott amenable to changes as long as the overarching achievement - the money in the state's bank account is unchanged? Signs point to yes.

Tribal officials - who are still locked in a court battle over whether they can keep blackjack tables in their casinos under the 2010 deal that expired last summer - may have to decide if they need to cobble together something that makes everyone happy. Or decide if they could take their chances and just wait until next year.

Scott has been very deferential so far in his public pronouncements and has made it clear that it's up to the Legislature to work something out. If it doesn't happen the governor can maintain it wasn't his fault.

How many gun bills will reach their target?

Apart from the budget and gambling battles, you can expect a fair amount of attention in the media to be focused on the gun bills already moving through the Legislature. These include bills allowing open carry of firearms, guns on college campuses and changes to the Stand Your Ground law.

The decision by legislative leaders to already allow these bills to move through legislative committees even before the start of the 60-day session is a sign that there is considerable support for them.

Plus long-time National Rifle Association lobbyist Marion Hammerhas made it abundantly clear that she and her supporters have no plans to modify their stances on these bills. Hammer has told everyone that she will be keep pushing the legislation for as long as it takes.

Put that together and it would reasonable to assume that most, if not all, of the bills stand a good chance of reaching Scott's desk later this year. Yes, there is opposition to the various bills, including Florida State University President John Thrasher and university police chiefs on campus carry to some of Florida's sheriff's on open carry.

But the gun bills give Republicans a chance to do something that will fire up their own political base heading into what could be a chaotic election season.

There is a caveat with all of this though and that's the unresolved question of whether the new Senate districts (which appear to tilt toward Democrats) will persuade some senators that contentious issues of this sort need to be put on hold until 2017.

How will the growing power of Joe Negron and Richard Corcoran affect the process?

The general theory about the Legislature is that the influence/power of the outgoing legislative leaders begins to ebb during their second session while the clout of their successors begins to grow.

There have been exceptions to that rule over the years i.e. Dean Cannon as House speaker and John McKay as Senate president.

There will be those who will make snide comments that Corcoran, a former top aide to Rubio and current House budget chief, already has considerable sway in the House. Yes there are many signs that he does wield a good deal of influence, but expect it to get even larger.

Among some insiders who follow the process the operating theory right now is that House Speaker Steve Crisafulli and SenatePresident Andy Gardiner will get to watch their top priorities pass in the opening days of the session. (For Crisafulli, a potential Agriculture Commissioner candidate, that's a comprehensive water bill, while for Gardiner it's bills to aid families with children who have developmental disabilities.)

After that moment of comity, the rest of the session will be conducted in Corcoran and Negron's shadow. That could affect plenty of important bills, whether it's Negron's support of a measure to legalize/regulate fantasy sports to the judiciary reforms that Corcoran has already promised to push through.

Other considerations: Negron, an attorney, has clashed in the past with the insurance industry so that may make it hard for them to push through changes opposed by trial attorneys such as the revamp of assignment of benefits. Corcoran - along with his successor Rep. Jose Oliva - have expressed skepticism about for targeted business incentives like those championed by Scott or for items such as film incentives or subsidies to sports teams and operations.

Will this really be a do-nothing year for the Florida Legislature?

Talk to most lobbyists and they will quietly concur: This may be a really tough year to get anything substantial passed.

The reasons are many, starting with the epic battles of last year (see No. 1) to what appears to be an unpredictable election year (see Trump, Donald.)

There is a feeling right now that any attempt to move major changes/reforms in key areas will be difficult. It's not just the gambling deal with the tribe. This could flow to everything else including the types of tax cuts, health care changes pursued by the House to some of the environmental bills being pursued to alimony reform and major education bills. If Republican leaders are intent on putting aside any public disagreements then the easiest way may be to just deep-six many of the more contentious proposals.

As of this past weekend, 1,644 bills have been filed which does appear to put the Legislature on pace to meet last year's totals so maybe legislators themselves remain somewhat optimistic that they can things done. There is always a natural tendency for the Legislature to try to fix/improve/change things and have something to campaign about in the fall.

But the most substantial year for legislation in recent years was 2011 when you had a new governor and a supermajority in the Legislature following the 2010 wave year for the GOP. That track record suggests that 2016 will be relatively quiet.

December 30, 2015

It's always been an open secret that Florida Gov. Rick Scott sticks to a script when he talks in public, especially when he occasionally answers questions from the press.

A reminder of that came recently when his office posted copies of what it calls "Driving Message" in response to a public records request by Tampa Bay Times reporter Steve Bousquet.

The information from October and November is essentially a rolling set of questions on topics/news of the day that includes the answer that Scott is supposed to be given when asked. The responses cover everything from campus carry gun legislation to what he thinks about GOP presidential candidate Donald Trump and why he's opposed to raising the minimum wage. ("Increasing the minimum wage will result in losing jobs.")

And the answers included in the documents are exactly what Scott has said about the various topics, whether it's a question about suspending school grades or the handling of Syrian refugees by federal government.

The talking points also give a small amount of insight about how Scott may handle issues in the near future.

The remarks, for instance, say he's not endorsing any GOP candidates for president "today" but they include praise for Trump despite the criticism aimed at the businessman from fellow GOP candidates such as former Florida Gov. Jeb Bush.

"I think people in Washington are trying to figure out why Trump is doing so well, but the reality is he is saying what he thinks. He is not being politically correct. I think a lot of people find that refreshing," state Scott's talking points.

Coupled with other things he has said about Trump _ and the fact that some of his own key supporters/campaign people are now working for him _ it would be plausible for Scott to endorse him ahead of the March GOP primary in Florida. (Although Scott has generally avoided getting involved in primaries given his own bitter, divisive primary for governor back in 2010 when he ran against establishment-backed candidate Bill McCollum.)

The answers included in the document regarding a bill that would allow concealed weapon holders to bring their guns on university campuses suggests that the Scott administration may have some doubts about the legislation. ("I am not sure there is a silver bullet solution, but college should be a safe place students go to learn, not a place of violence.")

But the main question is whether Scott and his team will revise this script as they head into 2016 and a session that starts in less than two weeks.

His talking points on tax cuts, hospital transparency, the proposed deal with the Seminole Tribe of Florida, and Enterprise Florida reforms don't fully explain Scott's logic. In other words, how exactly will Scott sell this?

Despite a contentious 2015 session that saw the GOP-controlled Legislature pare back, or ignore completely, many of his recommendations, Scott actually is pushing ahead with a more detailed agenda this upcoming session than he has during the last few years. And that creates plenty of potential flashpoints in the weeks and months ahead.

There's no doubt that his $1 billion tax cut package and his request of $250 million for business incentives are his top priorities as Scott makes a case to diversify the state's economy. He will make the argument in January - during a tour to emphasize job growth under his watch - that the state's economic recovery will not hold if more isn't done.

The problem for Scott and his team is that there is a wide divide in the House and Senate (which has been unable to agree on many top issues in the past year) on the right approach of so many of the items on Scott's 2016 checklist.

Gambling? It's not clear that there's enough votes in the Senate for the $3 billion deal proposed by Scott that would give craps and roulette to the Seminoles. But the House may not go along with the deal unless it includes a constitutional amendment that bars any future expansion. Senate President Andy Gardiner has said he's not sure there's enough votes in the Senate to pass such an amendment.

Business incentives? While the House and Senate may be willing to endorse Scott's "reforms" in regards to process, the idea of placing such a large amount of money in the governor's hands is viewed suspiciously by some House conservatives who consider incentives an intrusion into the marketplace.

Tax cuts? The amount is a hard goal to reach without making cuts elsewhere in the budget - which is something that legislators about to hit the campaign trail don't want hanging over their head. Another complication is that there is growing resistance to the reliance on increased local property taxes to help pay for school funding. House and Senate leaders say they like "tax cuts," but there is also divergence on whether those cuts should be more directed at individuals, not companies as Scott has largely proposed.

Hospital transparency? Scott's ongoing efforts to go after Florida's hospitals - including a price cap - includes some proposals that may strike some conservatives as intrusive government regulation not a free-market solution. House leaders have been pushing policies that they say will open up health care to more competition, while top Senate Republicans seem to have little interest in any of the ideas.

Scott, of course, has his veto pen as the ultimate bargaining tool as he deals with recalcitrant legislators.

The decision of Jesse Panuccioto resign from his job as the head of the Department of Economic Opportunity rather than confront a messy confirmation battle removed one potential point of leverage for the Florida Senate. But there are other agency heads whose adherence to Scott's agenda and seeming resistance to legislative instructions may make it difficult for them to survive what could be a messy session.

If the Legislature were in fact able to put together a budget quickly and present it to Scott before the end of the 60-day session, it would create a conundrum for the governor. He would be forced to act on legislative budget priorities within 7 days which would give lawmakers the ability to decide whether to approve some of Scott's top priorities based on how he handled the budget.

Another problem for Scott is that the consuming lobbying frenzy over the compact with the Seminole Tribe may distract legislators as they try to cobble together enough votes to pass something. (One possible solution is to have lawmakers pass the main compact, with the promise they will pass bills in 2017 to deal with other parts of the gambling industry.)

As all of this unfolds during the next two months, the question is whether Scott and his team will provide new answers, new insights and new arguments to counter the pushback that the governor is going to likely encounter.

Or will Scott stick to his oft-repeated line that he used time and time again where he will say that he expects the Legislature to "do the right thing" and vote exactly how he wants them to without explaining how, or why legislators should do that.

Maybe that will be the "driving message" that needs to be answered later in 2016.

January 05, 2015

Florida Gov. Rick Scott, considered one of the most vulnerable governors in the nation last year, will this week be sworn into a second term and take his place in state history as just the second GOP governor to earn re-election.

Scott's priorities _ which are likely to be reflected in his inauguration day speech _ won't be much of a surprise since he is expected to repeat what he's been saying for some time now.

Scott will stress jobs, the state's economic recovery, tax cuts, as well as other key parts of Scott's re-election platform such as keeping college tuition costs down.

But key questions remain, including whether or not Scott gets any kind of "honeymoon" after his narrow re-election. And additionally, how will Scott fare with the distractions, scandals and other problems that loom on the horizon?

Any of these could be a test for Scott and his campaign-hardened team led by Chief of Staff Melissa Sellers. After winning by roughly 64,000 votes how much political capital does Scott really have, and more importantly, how will he react if legislators, lobbyists and other in Tallahassee start worrying about the next set of campaigns instead of Scott?

it can be argued of course that as long as the state's economy continues to recover that Scott has met his primary challenge and the one that he ran on.

But there's plenty of challenges Scott will confront in the coming year that could cause him problems and harm his eventual legacy.

Here's just some of them:

WILL REPUBLICANS REMAIN TRUE TO HIM? One of the most immediate challenges is what type of control Scott will retain over the Republican Party of Florida. Scott, with input from people like Sellers and former chief of staff Adam Hollingsworth, helped put people in place at the RPOF whose primary job was focused on getting Scott re-elected.

But for a variety of reasons there are those who aren't entirely trustful. With possible presidential campaigns for either U.S. Sen. Marco Rubioand former Gov. Jeb Bush gearing up, those loyal to Rubio and Bush harbor lingering doubts about the party. Look no further than the decision to give the keynote speech in the party fundraising dinner to Louisiana Gov. Bobby Jindal instead of trying to tap someone like Rubio.

The big test for Scott will come later this month when Leslie Dougher tries to win a new term as chairman of the state party. An early endorsement from Scott for Dougher did not dissuade Blaise Ingolia, a newly-elected state representative, from challenging her. Due to party rules Scott has a great deal sway over the executive committee, but a defeat of his hand-picked candidate would be a bit of a blow as he starts his second term.

ROLLING THE DICE AGAIN: Last year Scott tried to come up with a new compact with The Seminole Tribe of Florida that would allow the tribe to continue to enjoy parts of its ongoing gambling monopoly while giving a sizable boost to state revenues.

State legislative leaders made it clear that the deal would be dead-on-arrival due to the ongoing battle between other gambling interests, including those seeking to bring resort styled casinos to South Florida. Key portions of the existing deal with the tribe will expire this summer. Some legislative leaders, such as Senate President Andy Gardiner, have made it obvious that the end of this deal is not a major concern even if means the state would lose out on several hundred millions a year by allowing the existing deal to end.

Can Scott come up with a deal that keeps the tribe happy, keeps the money flowing into state coffers, yet can also get enough votes in the Florida Legislature?

PRISON DEATHS: Scott late last year agreed to give Julie Jones, the former head of the Department of Highway Safety and Motor Vehicles, a $160,000 a year job (on top of her state pension) to come out of retirement and take over the Department of Corrections.

Jones is stepping into the post at a time when the agency is under fire for inmate deaths and allegations of cover-ups. Right now the Florida Department of Law Enforcement is investigating dozens of inmate deaths and even today a legislative panel is expected to delve into all of the problems at the state's prisons.

Scott, who initially wanted to slash prison spending when he was running in 2010, has tried to keep his distance from the ongoing problems. But the ongoing investigations and problems with some of the privatization efforts pushed under his watch may put the scandal at his doorstep.

LEGISLATURE GOING ITS OWN WAY: Republicans who control the Florida Legislature went out of their way in 2014 to ensure Scott had a successful session as he moved into his re-election campaign. But there's been the feeling that it was an uneasy detente. Scott had a rocky relationship with many legislators when he first came into office because he defeated the GOP establishment candidate Bill McCollum.

Now with nothing else to run for _ right now at least _ how cooperative will legislators be? Gardiner has maintained Scott retains a good deal of sway due to his veto power. And there are reports from legislators that Sellers herself has tried to go out of her way to reach out to them in a friendly manner.

Some of Scott's priorities such as boosting school funding should be an easy sell to lawmakers.

The recent news that the budget surplus increased could also make it easier for Scott to get legislators to going along with additional tax cuts. But $1 billion over the next two years? Permanent elimination of taxes on manufacturing? A property tax constitutional amendment? Some of these may prove to be a bit more challenging once legislators delve into the nitty gritty details.

Other flashpoints could flare up as well: Gardiner himself during a session with reporters said that if there was a push to approve a new deal with the Seminole Tribe that he wanted a full-blown look at the operations of the Department of Lottery. Is that a sign that Lottery Secretary Cynthia O'Connell could find herself in for a difficult confirmation process?

Will legislators also fault Scott for how his Department of Health has handled implementation of last year's medical marijuana law? Some Democrats are already suggesting that the department may be trying to stall implementation because there is an opposition to the law from within the administration.

Put it all together and it could mean that even this year Scott could have a bumpy session.

PUBLIC RECORDS BATTLE: Scott remains locked in a legal battle over how his administration handled public records that is just one of the reminders of how the former CEO turned politician has dealt with the state's open records law. The governor is being sued for allegedly violating the state's public records law.

Some may view the motives of Tallahassee attorney Steven Andrews as suspect. But Andrews has been successful in many of his endeavors, including winning his initial lawsuit over a land dispute with the state as well as his defense of one-time aide CarlethaCole in charges that she illegally taped another aide in the lieutenant governor's office.

Chief Judge Charles Francis will be confronted with deciding whether or not he believes that Scott's office violated the public records law and did not timely produce records records for Andrews. The practical implication of an adverse ruling would be limited since we are talking about a civil lawsuit, but it would still prove to be historic if a judge found fault with the governor.

SCHOOL DAYS: This coming year Florida is expected to transition away from the Florida Comprehensive Assessment Test and replace it with a new test intended to measure how students fare on the new "Florida standards" that are largely modeled after Common Core.

Common Core remains a radioactive term with some conservatives. Scott has tried to assuage critics by asking Education Commissioner Pam Stewart to convene a group to look at the standards once again. Meanwhile Stewart is also being asked to "investigate" the use of testing in Florida schools.

The most immediate problem is ensuring that the new test is administered smoothly and that there aren't any problems in evaluating the work of students.

But the continued focus on Common Core means that it will continue to a potential distraction _ and political problem _ for Scott and state legislators.

The other dynamic, however, is Scott will find himself confronting Bush and his allies if the governor tries to dismantle any of the main elements of the Bush's education reforms that were put in while he was in office.

HIGHER EDUCATION: Scott could also create friction with business leaders and legislators over his ideas for higher education as well.

Scott has pushed vigorously to roll back tuition hikes - and take away the power to let universities raise their prices. In his inauguration speech, Scott will expand that focus to suggest there should be limits on graduate tuition hikes as well.

But Scott's austerity pitch will come at a time when some universities like the University of Central Florida and the University of South Florida are coming up with plans to expand their campuses.

While it's true tuition doesn't pay for new buildings, any expansion brings with it higher operating costs, which have to be paid from either tuition or state general revenue.

Schools such as Florida State University led by new president John Thrasher want more money to boost faculty salaries in an effort to move FSU into the ranks of the nation's leading public universities.

While legislators backed Scott's tuition plan during a campaign year, it may be harder for them to ignore the requests from university presidents _ and local leaders _ who want their schools to grow.

THE NEXT ELECTION: Scott has been fairly good at avoiding getting too involved in presidential politics _ or even other significant state and local races.

But he might find that difficult as both the 2016 presidential election and the 2018 state elections begin to heat up.

It's widely believed that Agriculture Commissioner Adam Putnam will seek the governor's office in 2018. Putnam and Scott don't have a close relationship, partly due to the fact that Scott has several times threatened to veto Putnam's top legislative priorities.

There are signs - like in last year's final Cabinet meeting - where Putnam has shown that he now has no problem challenging Scott. That could grow as 2018 moves closer and Putnam decides to show even more of his independence.

Chief Financial Officer Jeff Atwater may run for governor as well and may also be eager to distance himself from Scott.

Presidential politics could also prove to be a complicating factor.

When Scott ran for a second term, he relied more on Texas Gov. Rick Perry and New Jersey Gov. Chris Christie than someone like Bush. (Bush probably spent as much time or more campaigning for Putnam's re-election as he did for Scott.)

If Christie jumped into the 2016 presidential race against Bush, would Scott be able to stay on the sidelines after all the work _ and money _ Christie delivered to him?

What would Scott do if the Legislature decided to change Florida's primary date in an effort to help Jeb? Would he go along, or veto the bill?

And if Rubio were to bypass re-election and run for president what would Scott himself do?

Scott considered running for U.S. Senate in 2010 but opted instead to run for governor. When asked recently about his future, Scott said he ran for governor and has no plans to run for anything else.

Would that change, however, if it were an open seat? Or would Scott back someone like Attorney General Pam Bondi _ who he does have a good relationship with _ over other Republicans who also might be interested in seeking to replace Rubio?

December 19, 2013

It's become clear by now that Gov. Rick Scott and his team have decided that their push for a $400 millon cut in automobile tag and registration fees is probably going to be the governor's number one priority heading into the 2014 session.

Scott in one week has already held two out-of-town events to promote his proposal even though the session start is still two-and-a-half months away.

The political calculus about the fee hike is that is gives Scott another way to contrast himself against former Gov. Charlie Crist in next year's governor race. It was Crist who in 2009 signed the $2.2 billion package of tax and fee increases into law.

But there's also another person with a vested interest in all of this. And that's Chief Financial Officer Jeff Atwater.

Atwater was Senate president in 2009 when legislators crafted the tax and fee hike package as part of a way to close a substantial budget gap. (Legislators also accepted federal stimulus dollars and made budget cuts.)

If Atwater were to ever run for governor (in 2018 assuming he wins a second term as CFO) the package could come back to haunt him. So on the very least Scott's decision to push for a rollback could help Atwater down the line.

But as of right now Atwater is not running away from his decision to support the hike as a way to get through a tough budget year when Florida's economy had been battered due to the Great Recession.

"I took my votes and made my call and I should be held accountable for every choice I made,'' Atwater said.

Atwater points out that the decision to raise the auto registration fees originated in the House, while the Senate's initially backed an increase in cigarette taxes. He contends that the final package was a "middle ground."

But Atwater added that while he takes "ownership" of his decision he also supports Scott's decision to cut the fees now.

"I take ownership of everyone of those calls I made and how we ultimately pieced it together at the time to make it work','' Atwater said. "I think going back and looking at those choices is a good thing and I think the governor is on the right track."

So far Scott has been measured in how he has been mentioning the fee hike. He has said there's a surplus now and people deserve to get some money back. (It may be another time to note that as the election draws closer Scott has taken a populist bent on which taxes & fees to go after. It was the elimination of the corporate income tax, after all, that was a main component of his 7-7-7 plan.)

But if the Scott campaign and party apparatus go full throttle against Crist on this issue they may be damaging the political future of those waiting in the wings.

December 12, 2013

After more than three decades in state government, the man who helped shape Florida's budget during one of its worst economic stretches is about to step down for good.

Jerry McDaniel will leave his job as the budget director for Gov. Rick Scott at the end of this month. He'll be replaced by Cynthia Kelly, who by all accounts is about to become the third person _ and first woman_ to have ever held the budget director job for the House, Senate and governor.

McDaniel, whose background is in accounting, holds a somewhat unique position: He's someone who worked for Gov.Charlie Crist and then managed to maintain his position in the administration of Gov. Rick Scott. (McDaniel briefly was planning to exit the governor's office during the transition, but he wound up staying.)

McDaniel is leaving state government now because he has to. He signed up for the state's optional retirement investment program which requires employees to leave within five years of enrollment.

In a brief interview earlier this week, McDaniel said that if he could he would have liked to have remained working for Scott for his entire first term.

And that means McDaniel isn't gliding into retirement.

McDaniel is currently working with Kelly _ who started in November _ on Scott's final slate of budget recommendations during his first term. A key component of those 2014-15 budget recommendations will be Scott's push for $500 million in tax and fee cuts. Scott is announcing today in Tampa that he wants the biggest chunk of that tax/fee cut package to go to rolling back auto registration fees that were approved by the Legislature in 2009 and signed into law by then-Gov. Crist.

To be able to have some sort of budget surplus to work with is a bit of a new phenomenon for McDaniel. He recalls that upon immediately entering office that Crist's initial budget recommendations in 2007 were considered somewhat unworkable because the economic forecasts for the state were quickly changing.

It was McDaniel who helped shape a series of state budgets during the time the Great Recession battered the state's economy. He was there when the Crist administration accepted billions in federal stimulus in order to balance the state budget - and he was there when Scott rolled out an initial budget in 2011 that called for huge tax cuts as well as a large cut to education spending. Scott of course would later recommend bolstering education funding, including pushing for a $1 billion boost this current year that included money for teacher pay raises.

When asked he said he enjoyed working for Crist while he was governor. But he also was very praiseworthy of Scott, saying that the former health care executive is very hands-on and likes to engage in-depth conversations about budget policy.

McDaniel adds that Scott encourages debate among his own staff about policy suggestions.

As for Scott's eagerly-awaited budget recommendations, McDaniel gave a few insights.

He did concede that with this year's current estimated budget surplus that repeating a $1 billion boost in education spending and cutting taxes and fees by $500 million is unlikely.

But McDaniel was quick to point out that there is still enough money to boost per-pupil spending in the fall of 2014.

McDaniel also noted that local property values are rising _ and with it property tax collections _ meaning that the state is not going to have to backfill money to help keep school district budgets stable. In the last few years part of the increased state funding has gone to replace lost local dollars.

"Everything is turning in the right way for the 14-15 budget,'' McDaniel said.

March 28, 2012

Gov. Rick Scott on Wednesday will sign several bills that consist of the "jobs agenda" that he outlined last fall.

And that's when it will start to get interesting.

There have been few surprises so far since the 2012 session ended. Scott signed the "inspirational messages" bill and this latest batch of legislation includes an overhaul of the unemployment compensation system and tax breaks, including another small cut of the state's corporate income tax.

But in the next few weeks Scott will sort out the remaining bills from this year and figure out whether or not he plans to go along with many of the ideas that his GOP colleagues in the Legislature acted on.

Not counting his budget vetoes, Scott last year vetoed 10 bills sent to him by state lawmakers, which is actually on par, or even a little bit below other governors in recent years.

Gov. Charlie Crist - who was at war with lawmakers during his independent bid for U.S. Senate in 2010 - vetoed 17 bills his final year in office (several of which were later overridden) and 18 bills in 2007. Back in 2005 then Gov. Jeb Bush a.k.a. "Veto Corleone" nixed some 36 bills sent to him by the Legislature.

It was Bush who told Scott in an email before he became governor that it was okay to veto "stupid bills."

Here then are some bills to watch Scott on in the next few days and weeks:

HB 5301: Back when Scott was campaigning against Bill McCollum in the GOP primary in 2010 he actually came out against what he called mandates being imposed on local governments. Scott told a group of business leaders in Panama City that he did not support strict limits on spending and taxes for local governments, saying at the time "I believe that what Tallahassee should be doing is dealing with Tallahassee issues."

But sitting on his desk is a budget conforming bill that contains a contentious provision that withholds money from counties in an effort to collect $325 million in contested past-due Medicaid billings. County governments have argued this is yet another mandate, an argument that should have some resonance with Scott.

This legislation, however, includes several other changes, including a limit on how many times Medicaid will pay for hospital emergency room visits for non-pregnant adults and a provision that would allow the children of state employees to be enrolled in the state's subsidized KidCare program. Scott must act on this bill this week but there are signs that he will let it become law because it is tied to the state budget. (UPDATE: Scott signed the bill, although in a letter the governor tried to assuage counties that the state would "work diligently" to make sure that all the billings are valid and accurate. Counties, meanwhile, sharply criticized the decision as a "body blow" to taxpayers.)

HB 7129: This is the tuition bill for the University of Florida and Florida State University. If it becomes law the legislation would allow these two research universities to raise tuition annually above the existing 15 percent cap that now exists in state law. The logic behind the bill - which was a top priority for House Speaker Dean Cannon - is to give UF and FSU the financial resources to make themselves more nationally competitive. But the bill also clashes with Scott's oft-repeated line that tuition should not go up this year and that universities ought to give him more examples of spending existing money wisely before hiking tuition. (UPDATE: Scott vetoed this legislation saying it would increase the debt burden of students.

SB 1994: The Florida Polytechnic University bill. This is the legislation pushed by Sen. J.D. Alexander that would officially divorce the Lakeland branch campus of the University of South Florida and turn into the state's 12th public university. Scott so far has refused to take a stance on the creation of a new school, but has expressed skepticism about it. The problem for Scott, however, is if vetoes the bill then he wipes out $16 million in funding, including $6 million for the USF College of Pharmacy and $10 million to allow current USF Polytechnic students to complete their degrees at USF. (UPDATE: In a bit of surprise, Scott signed this legislation into law.)

HB 7117: This is an energy bill that was championed by Agriculture Commissioner Adam Putnam. But the legislation - which includes $16 million in renewable energy tax credits - has come under fire by several different groups, including conservative organizations as well as the Florida Renewable Energy Producers Association. Scott during his first two years in office has continued to be skeptical about energy issues, although his main objection has centered around proposals that would raise utility bills in order to pay for renewable energy. (UPDATE: Scott signed this law although he expressed concerned about some of the provisions.)

HB 5011: State Information Technology. For most people outside of Tallahassee, this bill means little. But it's a big deal for the lobbyists and others who make a living off the millions spent by the state on technology. This bill blows up an existing state agency - the Agency for Enterprise Information Technology - and creates a new agency called the Agency for State Technology which reports to the governor and Cabinet. For those who aren't keeping count this would be the third reconfiguration of how the state handles technology issues in the last decade. The legislation also halts and repeals an already begun process to consolidate the state's email service. Rep. Denise Grimsley, the House budget chief, defended the move to get rid of the email consolidation, contending it would wind up costing the state more than anticipated. But it's worth pointing out that Scott himself early on wondered aloud why state government had multiple email accounts as opposed to the way that most businesses handle it. (UPDATE: Scott vetoed the bill.)

HB 945: Broadband Internet Service. This is another bill that not a lot of people kept an eye on. It transfers a federal stimulus-backed program from one state agency to another. But the legislation was pushed into law at the urging of lobbyists who work for a vendor that held a state contract that was not renewed. The Associated Press already reported that the legislative proposal was so closely aligned with the lobbying firm of former Republican Party of Florida chairman Al Cardenas that the Senate bill sponsor referred questions about the bill to a lobbyist working for Cardenas. That same AP story pointed out that the state agency now in control of the program has warned internally that the transfer will require federal approval and could put millions in federal grants in jeopardy. (UPDATE: This bill was signed by the governor.)

HB 937: Legal notices. Just consider this one a bit of a hunch. Scott of course famously shunned newspaper editorial boards during his 2010 campaign for governor. But since that time he has actually taken a keen interest in the news industry, including recent business moves in Florida such as the decision by Halifax Media to acquire papers owned by the New York Times Company. This legislation is aimed at ending a few years of battle over the future of legal notices. The bill requires the online listing of legal notices for no extra charge, but also keeps them in printed newspapers. In previous years legislators had tried to end the use of printed legal notices completely. The final product is supported by the Florida Press Association so it will be interesting to see how the governor responds.

November 04, 2011

In a series of recent stump speeches, Gov. Rick Scott has emphasized that his goals remain simple: Keep down the cost of living, create jobs and improve education.

Scott's agenda for 2012 includes a smattering of additional tax cuts and a continued drive to eliminate regulations that could be holding back growth in a state that is dealing with 10.6 percent unemployment.

But now there's a big tax hike on the horizon that could hamper his plans.

For two years, state lawmakers have pushed back significant hikes in the state's unemployment compensation taxes.These are the taxes that are used to help pay benefits to the nearly 1 million people out of work.

But preliminary figures released Thursday show the minimum tax rate for employers is expected to jump from $72.10 per employee to more than $170 per employee. The maximum rate is also expected to rise from $378 to $459 per employee.

"This is a big deal," said David Hart, executive vice president of the Florida Chamber of Commerce. "The last thing we ought to be doing is putting additional burdens on employers."

So far neither Scott nor the Republican-controlled Legislature has talked much about this. Even the Chamber itself gave the issue only a brief mention in its 2012 list of priorities.

But Hart himself says discussions are already underway to try to convince state lawmakers that something needs to be done to "soften the burden."

It's not as if this is surprising since lawmakers nearly two years ago delayed another big tax hike. But back then the hope was that the economy would have turned around enough by 2012 so that employers could afford the higher costs.

One of the ways the state could ease the burden on employers is by rolling back some of the planned tax increases, but the downside is that it extends the amount of time it will take the state to pay back the federal government.

Right now the state owes $1.7 billion in loans that were used to keep the unemployment compensation trust fund solvent since 2009.

This year business owners paid a special assessment to cover interest that is now owed on the outstanding balance. But there's an additional penalty if the state does not promptly repay the federal government: The loss of federal tax credits. (Right now employers get a tax credit for their state unemployment taxes that is deducted from federal taxes they owe.)

Scott, who rolls out his 2012 budget proposal in early December, could offer to have the state to pay the interest charges in the coming year if the big tax hikes are delayed yet again.

But the problem for the governor is he is dealing with a projected budget shortfall that ranges - depending on who you ask - from $1.2 billion to $2 billion.

The question for the governor and the GOP-controlled Florida Legislature is whether or not the unemployment compensation tax hike rises to the level that it trumps other budget and tax considerations.

Would Scott, for example, go along with helping stall the unemployment tax hike which will affect nearly 460,000 businesses across the state in exchange for backing off his push for another small cut in the corporate income tax that he has vowed to eliminate in seven years?

Or does Scott come up with enough cuts to accommodate the shortfall, the tax cuts he has already proposed, as well as take care of unemployment tax hike?

April 13, 2011

The House and Senate have passed rival versions of the state budget and the negotiations between Republican leaders have already begun, although out of sight and quietly right now.

When you are talking about spending close to $70 billion there is a lot of moving parts. And with talk of deficits, shortfalls, budget cuts, trust funds, allocations it can be a bit overwhelming.

Consider this a quick and easy guide to the main concepts in play with the promise that more may come later:

IT'S A BUDGET SHORTFALL, NOT A DEFICIT: Sometimes there is a temptation to use the terms shortfall and deficit interchangeably. But it's not accurate. Florida has a projected $3.75 budget shortfall not a deficit. In other words, it's not that revenue is dropping. It's that the revenue is not rising fast enough to meet all the projected budgetary needs.

Part of those budgetary needs have been caused by the loss of federal stimulus dollars at the end of June. Lawmakers used the stimulus to cushion the state budget when state tax collections were in fact dropping due to the recession and implosion of the state's real estate market. But the stimulus money is going away - and the places where that has a big impact is in the Medicaid program and in public school funding. The biggest reason for Gov. Rick Scott's 10 percent proposed cut in school funding was that Scott said he had no intention of replacing federal stimulus dollars with state dollars.

Legislative leaders have made it clear that they do not intend to raise revenue (with a few caveats) to deal with this shortfall. So they are looking at cutting the budget and forcing state workers to pay part of their pension costs to make up the difference.

IT'S ALL ABOUT ALLOCATIONS, ALLOCATIONS, ALLOCATIONS...While many lawmakers have a say in many of the line-items included in the budget, the starting point is really concentrated in the hands of a few people. Both Senate President Mike Haridopolos and House Speaker Dean Cannon must agree on how money to "allocate" to each of the separate areas of the budget. There's only so much money that can go around. And if you give more money from one area, you have to take it from someplace else.

And part of the allocation process is not just deciding how much money goes to schools or health care. It's how much money that can be used to offset tax cuts. Gov. Rick Scott asked for nearly $2 billion worth tax cuts and he said he's "comfortable" that lawmakers will give it to him, especially his corporate income tax proposal. The bottom line, however, is that state lawmakers can't come up with a final budget until the two legislative leaders sign off on the allocations. And that means it's largely up to the legislative leaders to decide whether they want to give Scott what he wants.

WHO IS THIS GENERAL REVENUE?...The money that is part of the important allocation process is known as "general revenue." This is Capitol shorthand for the state's main checking account. This is the money that comes primarily from the state's 6 percent sales tax, but a handful of other taxes as well such as the corporate income tax, the insurance premium tax and documentary stamp taxes on real estate transactions.

When the amount of general revenue goes down - or doesn't go up as fast as expected - it causes a big problem for state lawmakers since it's their main source of income. But it's important to point out that general revenue is expected to generate $23.8 billion in the coming year. So no, the final amount of spending and the budget is not completely dependent on just general revenue. The final budget amount is also dependent on federal aid and how much money the state takes in what are known as "trust funds."

WHO DOES MONEY FROM A TRUST FUND BELONG TO?...Copious amounts of debate has already been held this session about "trust funds." So what are they? Trust funds are accounts that are set up in state law with a dedicated source of revenue and a dedicated place where the money is spent. And therein lies the big argument. Many groups that pay fees or taxes that wind up in these trust funds view these accounts as special. And they get upset when state lawmakers tinker with them.

Supporters of trust funds argue that a promise was made and that the money should continue to be spent on that program regardless of the ongoing financial realities of the state. There is a fear that a fund dedicated say to affordable housing will vanish and never come back if it is mixed in with money that also goes to schools, health care and prisons. But the counter argument is this: Is it really fair to cut funding to schools and health care while another state program remains intact? Yet groups - whether they are gun owners who pay a concealed weapons fee or those who pay a tax on real-estate transactions - argue that it is a defacto tax increase if money isn't spent the way they want.

HOW MUCH IS THE STATE REALLY SPENDING?...Most people are aware of the ongoing Washington D.C. debate about budgets and what's covered and what's not. Well there is the same kind of debate going on this year in Tallahassee. How big is the state budget really? That's not an easy question to answer. One of the biggest differences right now between the House and Senate budgets is that the Senate budget is much larger because it includes items in the budget that the House doesn't include.

Is this a big deal? Yes and no. If an item is in the budget that means that state lawmakers ultimately control the overall amount spent. That's the logic behind including the budgets from water management districts in the Senate version. But there's also a political dynamic at work here. The more stuff you put in the budget the larger it gets. And at the end of the day, how you explain to voters that the budget you approved was actually larger on paper than the one approved a year ago?

But in reality lawmakers have routinely put stuff in and then yanked stuff out of the budget. It can make it hard to get a read on the complete level of state spending because sometimes they appropriate money in other bills unrelated directly to the budget. Plus, there are lot of other things controlled by state government that aren't annually budgeted such as money shared with city and county governments.

RECURRING OR NON-RECURRING?..You could say money is money. But in the world of the Capitol there's two kinds. There's the kind of money that everyone thinks will keep coming in year after year or "recurring." Then there's "non-recurring," or a supposed one-time windfall that may not be there next year.

The reason that lawmakers separate the two is that there is a thought that it's a bad idea to tie an ongoing expense to non-recurring money. The theory is that this is like wiping out your savings account in order to pay your mortgage. You will get another bill in a month so you have only delayed your financial problems. Now that's not to say that lawmakers haven't done the same thing in the past.

But the state constitution actually places a limit on how much non-recurring money can be placed in the state budget. Anything above 3 percent requires a three-fifths vote of the entire Legislature. So why is this a bit of a problem this year? Because one of the key problems with Gov. Rick Scott's push with phasing out the corporate income tax is that once you do that it starts converting so-called recurring money to non-recurring money. Even if lawmakers passed a bill this year that phases it out over the next seven years the economists will start counting it differently because now the money is "non-recurring."

THOSE PESKY CONFORMING BILLS...It used to be that state lawmakers would pass a 500-page budget and it included all sorts of directions and instructions on how to carry out the budget. Over the years - and thanks to some lawsuits along the way - the Legislature has started passing dozens of so-called "conforming" bills to accompany the budget.

Sen. Don Gaetz last week asserted that these bills aren't usually substantive. Hmm. That may be true for many of them. But in reality these bills are measures that change state law in order to carry out spending reductions or changes. These measures can be just as sweeping as the budget. For example, how about a "conforming" bill that says money from a cigarette tax hike passed two years ago will no longer go to cancer research.

But it's more than just that. Lawmakers have placed all these conforming bills into the actual budget conference process. So what does that mean? That means they can't be amended once they reach the House and Senate floor. Last week, for example, the House and Senate included their pension reform bills into the budget conference. That means once top leaders negotiate what's in the bill it will be subject to an up or down vote. This has been a problem in the past because until last year the wording of conforming bills was decided behind closed doors.

In response to the scandal involving former House Speaker Ray Sansom, legislators vowed to go over each and every conforming bill in a public meeting. They have promised to do the same this year and a new clause in legislative rules requires a 24-hour waiting period before a final vote can be taken on conforming bills. The bottom line is this that t's not just the budget that you need to watch.

TURKEY AND PORK...No, this is not a Thanksgiving Day menu. In most places when a powerful politician puts something in the budget it's called "pork." In Tallahassee, the parlance is a budget "turkey." Of course, what gets defined as a turkey or pork is a matter of great debate each and every year.

The way the budget process usually work is this: First state agencies put in what's called a "legislative budget request." This is supposed to be an independent assessment by the agency of its financial needs in the coming year. Of course, surprise, surprise, some agencies have not followed that edict especially when agency heads report to a governor who has made it clear that he doesn't want his agencies asking for any additional money. After the "LBR's" are released, the governor takes that information and presents his official budget recommendations to the Legislature.

Lawmakers take the governor's recommendations and build upon it - adding or deleting things that they don't agree with. Many people say that anything not recommended by the governor or by a state agency is a budget turkey. In a lot of instances this is state money set aside for some type of local project or service. Over the years legislators have argued that their opinion on spending items is just as legitimate as that of an agency head in Tallahassee.

LINE-ITEM VETO POWER...One of the most important things to remember about how the state handles its budget is that the governor has line-item veto power. This means that the governor can completely eliminate any spending item without eliminating the entire budget.

Now, theoretically there are limits to this power. A governor is not legally allowed to veto what is called "provisos" or instructions that accompany certain spending items without wiping out the spending item as well. The governor is also not allowed to veto part of an appropriation. So guess what happened under former Gov. Charlie Crist? Yep. Crist pretty much ignored these restrictions in law.

Did lawmakers complain? Sure they did. But they didn't sue to stop him either. Why is this so important? Because there is ample evidence that the current Legislature will not take the same stance with Gov. Rick Scott. Scott has already ruffled feathers with several steps he has taken that some legislators contend exceed his constitutional limits. If Scott uses the precedent set by Crist it could spark a full-fledged legal battle in front of the Supreme Court later this year.